LONDON, June 5 (Reuters) - Premier Oil will issue
discounted shares to activist hedge fund ARCM representing 8.91%
of the company to pay for North Sea assets from BP, which
agreed to reduce the price, Premier said on Friday.
ARCM, which owns around 15% of Premier's debt and has a
large short position in its shares, has agreed to drop its
appeal against a court scheme to facilitate Premier buying the
BP assets, Premier said.
The deal will involve Premier paying BP $210 million in cash
and reduces Premier's liability for field abandonment to $240
million from $600 million.
It replaces an initial scheme which would have involved a
broader capital raising to pay the initial price of $625 million
and extend Premier's debt maturities by two years.
"We are pleased to have agreed revised terms with BP for the
proposed acquisition of the Andrew Area and Shearwater assets,"
Premier CEO Tony Durrant said, pointing to a plan to waive debt
covenants until September.
"The (...) Agreement, once agreed with and approved by
lenders, will provide a basis for the Company to continue
discussions regarding proposed amendments to the Group's
existing credit facilities."
Premier, which had a market capitalisation of $336 million
as of Thursday and $1.9 billion in net debt, will issue 82.2
million new shares to ARCM at a price of 26.69 pence each, a
9.64% discount to the volume weighted average price over the
last five days to fund the BP assets, it said.
(Reporting by Shadia Nasralla; editing by Jason Neely)
BP (BP.)